The World Is Dark! US Fix Recession, Minus Economy

Jakarta, CNBC Indonesia – The United States (US) is confirmed to enter the brink of recession. This is after the release of data on gross domestic product (GDP) growth in the second quarter of 2022 which still shows an annual contraction.

An economic recession can simply be defined as a condition in which the economy of a country declines two or more consecutive kartals in one year. However, this is not an official definition.

Based on data from the US Bureau of Economic Analysis released Thursday afternoon local time, the US economy contracted 0.6% on an annual basis in the second quarter of 2022. This is unchanged from the initial reading at the end of last July.



The data confirmed that the US had entered a technical recession. Because Uncle Sam also contracted 1.6% in the first quarter of 2022.

However, the GDP growth data last year turned out to be better than the previous record. The US Department of Commerce in its annual revision of GDP data stated that US GDP increased 5.9% in 2021, up from the previously reported 5.7% growth.

Meanwhile, the economy contracted 2.8% in 2020. But not as deep as the previous publication of -3.4%.

“The pandemic recession from the fourth quarter of 2019 to the second quarter of 2020 was slightly less sharp than currently published,” said Erich Strassner, director of the National Association of Economic Accounts at the Commerce Department’s Bureau of Economic Analysis.

“The recovery from the second quarter of 2020 is a bit stronger,” he added.

Read also  2022 - Today's Mortgage and Refinancing Rates: September 28, 2022 | The courses continue to rise

The upward revision to GDP in the past two years largely reflects more consumer spending, exports, and federal spending. This is than previously reported.

Previously, the US slowdown had been heralded by a number of world institutions. In a statement in early September, US Treasury Secretary Janet Yellen had confirmed there was a risk of a recession, although she denied that it had caught on at this time.

This is because the US battle against inflation could slow down the country’s economy. The central bank, the Fed, continues to raise interest rates.

“The American recession is a risk when the Fed (US central bank) tightens monetary policy to tackle inflation,” he told CNN Internationalquoted AFP.

“So that is certainly a risk that we are monitoring,” he said.

However, he believes a serious downturn in the US economy can be avoided. He added that the country has a strong labor market that can be maintained.

“Inflation is too high, and it’s important for us to bring it down,” Yellen said.

The US itself recorded the highest inflation in 40 years in June. At that time the consumer price index was at 9.1%.

The slowdown in other developed countries is also said to have occurred in China and the UK. The World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB) have repeatedly raised the dangers of a recession in 2023.

[Gambas:Video CNBC]

Next Article

The Shadow of Recession in America is Realizing! Indonesia Safe?